Direct trade cancellations: who's to blame?25 March 2020
We get a lot of questions about cancelled orders in direct trading. Who pays for the costs in this situation? Buyers invoke force majeure. When does force majeure occur? Please find out below what you need to take into account:
Check what conditions you have agreed
For growers and buyers, it is first and foremost important to find out exactly what agreements have been made. If direct trade takes place via Royal FloraHolland, the Connect conditions apply, unless the buyer and grower have made other agreements. Some buyers use their own conditions and ask growers to sign them. If so, these mutual agreements apply and not the Connect conditions. It is also possible that the parties in the contract have made specific agreements about when an order can be cancelled or that certain situations are excluded from force majeure.
Force majeure according to the Connect conditions
According to the Connect conditions used by Royal FloraHolland
for direct trade, in the event of an order being cancelled based on
force majeure due to Corona, there is only force majeure if trade
can no longer take place as a result of government intervention.
Examples: the government prohibits the trade in flowers and plants,
the border closes, the transport of flowers or plants is no longer
permitted. The buyer can then claim force majeure. The costs are
for the grower. These conditions are in line with Dutch law.
In short: government decisions can lead to force majeure; decisions, expectations, staff shortages or disappointing sales of individual trading partners cannot.
What to do in case of force majeure
If a buyer or grower can prove that he is unable to deliver or act as a result of an imposed government decree, he can invoke force majeure in writing and thus cancel the order without being obliged to pay any compensation. The buyer or grower must notify the other party of this appeal to force majeure and the cancellation by e-mail, with a copy to Royal FloraHolland
When is there no force majeure?
Force majeure must be considered on a case-by-case basis. For example, there is no force majeure in the following situations:
- The border is closed for passenger transport, but not for transporting goods. Therefore, it is still possible to unload at customers' premises and the obligation to purchase the goods will remain unaffected.
- The shop will remain open and the government permits the sale of plants there. Even then, the purchase obligation remains unchanged for the time being.
- The end customer adjusts his purchase expectation and orders lower quantities from the exporter instead of the quantities originally agreed, and the exporter then passes this on to the grower. In this case there is no force majeure and the exporter must fulfil his purchase obligation to the grower.
- If the end customer no longer wishes to purchase the products previously ordered. That is a dispute between exporter and end customer, and not between the grower and the exporter in question.
- An end customer closes his own shop(s) as a precautionary measure. Again, this is not a case of force majeure but rather an issue between buyer and end customer.
Mediation by RoyalFloraHolland
Royal FloraHolland can advise you and mediate on your behalf if
you trade according to the Connect conditions and the grower or
buyer invokes force majeure. Contact Customer Service for further
When is there force majeure according to any other conditions?
When the grower and buyer have made other agreements in a contract, then these agreements exceed the Connect conditions. Also when payment is made through Royal FloraHolland. Royal FloraHolland has no insight into the agreements made by growers and buyers one-to-one.
International trade under Dutch law
For international members, it is important to note that direct trade through Royal FloraHolland is always governed by Dutch law, unless otherwise agreed between the grower and buyer.
Do you need advice or mediation? Please contact Royal FloraHolland Customer Service.
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